‘They Distort The Market’: Musk Says He Opposes Biden’s Tariffs On Chinese EV

Topline

Tesla CEO Elon Musk on Thursday said he opposes the U.S. government’s move to levy 100% tariffs on Chinese electric vehicles—announced by the Biden administration last week—in a change of tone from remarks he made earlier this year, when he warned about the threat Chinese EV companies posed to global car makers without trade barriers.

Elon Musk said neither he or his company Tesla had asked for the tariffs on Chinese EVs

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Key Facts

The billionaire said Tesla “competes quite well” in the Chinese market and said he generally favored no tariffs and no tax incentives for EVs or gas-powered vehicles.

Musk added “things that inhibit freedom of exchange or distort the market are not good.”

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News Peg

Musk’s latest remarks were a departure from warnings he had issued about Chinese EVs earlier this year that appeared to call for government intervention. In Tesla’s earnings call in January, Musk said Chinese EV makers were the “most competitive car companies in the world” and he believed they would have “significant success” globally “depending on what kind of tariffs or trade barriers are established.” The Tesla CEO then warned that “if there are no trade barriers established, they will pretty much demolish most other companies in the world.” China is Tesla’s largest foreign market and the carmaker faces strong competition there from homegrown brands like BYD and Nio. Musk has praised these companies in recent years, saying he has a “great deal of respect” for them and has said “some company out of China is the most likely to be second to Tesla” in the global EV race.

Tangent

Musk was also asked at the conference whether the tariffs were a green light for Tesla to push forward with a low-cost model and if there was a timeline for it. But the Tesla CEO refused to give details, noting he dislikes answering questions that would directly impact the company’s stock price. Musk’s comments come amid speculation about the future of its low cost car plans. Last month, Reuters reported Tesla was halting work on a cheaper EV to focus on self-driving robotaxis. Musk denied the report, tweeting “Reuters is lying (again),” but did not offer details. A Tesla priced at around $25,000 has been a long-stated goal for Musk and his company and the billionaire previously said he expected the model to be available in the second half of 2025.

Key Background

Last week, President Biden unleashed new tariff hikes against imports of Chinese electric vehicles, semiconductors, batteries and steel. The headline move was the increase in tariffs on Chinese electric vehicles from 25% to 100%. The White House said the levies were necessary to fight against “China’s unfair trade practices,” and its rampant “intellectual property theft” and habit of “flooding global markets with artificially low-priced exports.”